The Investment Column: Oil stocks
Tuesday 28 September 1999
It appears not. True, equity markets are coming under pressure because of fears that interest rates will rise. But the integrated oil companies are well placed to benefit from the synchronised GDP growth the world is expected shortly to deliver. In the meantime, winter will see the usual seasonal pickup in demand for crude.
So why the profit-taking? Oil prices cannot be sustained at these levels. Warburg Dillon Reed, for example, sees an average price of $18.50 next year, steadying at $16 thereafter. The fear is that the return to such levels will be sudden, and so will the falls in the price of the integrateds. That fear seems misplaced. Opec's disciplined stance on production limits continues. The expected increases in crude demand should enable it to relax those limits in a managed manner, without prompting a crash. In any case, BP Amoco and Shell are now entities that can cope in a lower oil price environment. Analyst see the shares at current levels as good value even assuming a return to cheap oil.
Meanwhile, the completion of BP Amoco's takeover of Arco will mean funds will have to increase their weighting in the stock. And Shell's on-going restructuring programme will continue to generate good newsflow. At 1094p and 456p, both BP Amoco and Shell are looking oversold.
- 1 Frank Lampard's face drops when Holly Willoughby introduces him as a 'Man City legend'
- 2 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 3 The confessions of men who ordered mail-order brides
- 4 General Election 2015: Stephen Hawking says he will vote Labour
- 5 Yazidi sex slaves undergoing surgery to 'restore virginity' after being raped by Isis militants
General Election 2015: Tories sack candidate who said she would never support 'the Jew' Ed Miliband
The four utterly contradictory polls that tell the story of this election and why it is pointless trying to predict the outcome
9/11: Iranian General accuses US of organising September 11 terror attacks
General Election 2015: Prospect of Labour-SNP coalition makes one in four voters less likely to support Ed Miliband, says survey
General Election 2015: Stephen Hawking says he will vote Labour
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Aaron and Melissa Klein: Oregon anti-gay bakers ordered to pay $135,000 after refusing to make cake for same-sex wedding
Andrew Lloyd Webber: Phantom of the Opera writer mocked after issuing a warning about Ed Miliband and Nicola Sturgeon
General election 2015: Labour will toughen hate crimes legislation surrounding Islamophobia
EU exit would hit UK economy much harder than neighbouring countries, study finds
iJobs Money & Business
£Basic (OTE) + Uncapped Commission: Guru Careers: A Stockbroker (qualified / p...
£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...
£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...
£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...